Coal stocks have clearly been out of favour however we see a short term opportunity to establish a position in Whitehaven Coal (WHC) based on a disconnect between the underlying commodity and the price of WHC. At current coal prices WHC is worth ~$2.50 in MM’s view and while we’ve been talking about this trade for some time, we are now pressing the button. This is a shorter term high risk position where MM is looking for upside in the coming months, not years.
MM is buying WHC in the Flagship Growth Portfolio with a 4% weighting around $1.78
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